Today is your 40^th birthday. Your expect to retire at age 65 and actuarial tables suggest that you will live until 100 years. You want to move to London when you retire. You estimate that it will cost you $200,000 to make the move (on your 65^th birthday) and that your annual living expenses will be $25,000 a year after that. You expect to earn an annual return of 7% on your saving.

1) How much do you need to save now before your retirement date comes?

2) You already have $50,000 in saving. How much would you need to save at the end of each of the next 25 years to be able to afford this retirement plan?

3) If you do not have any savings currently and do not expect to start saving money for the next 5 years (that is, your first saving payment will be made on your 45^th birthday), how much would you have to set aside each year after that in order to be able to afford this retirement plan?